Online ad spending still growing, but slowing down

In the last 2 years, online advertising growth rates have grown at 30%. However, figures published by emarketer indicate a slow down in growth rates. Specifically emarketer projects growth rates of 26.8% and 15.8% respectively in 2006 and 2007.

But despite the slow down, internet advertising translated to dollars is enormous. In 2006, $15.9 billion dollars will be spent on online advertising. By 2008, this will reach $21 billion, and by 2010 surpass the $25 billion mark.

Emarketer predicts the following 5 key trends that will support the continue growth of internet ad spending

1. Ad spending shifts from other media, most notably broadcast television and newspapers, to the Internet
2. Larger Internet ad budgets in general as companies both grow more accustomed to various online ad formats and increasingly seek the audience found on the Web
3. Higher prices for both branding ads (video and plain display) and direct response vehicles (mainly paid search)
4. Branding objectives becoming increasingly relevant online, which will lead more marketers who have spent little for Internet advertising to devote larger budget shares to various interactive formats, most especially video
5. The continued small shares many large marketers budget for Internet advertising, which need to budge by only a few percentage points to create relatively large gains for this advertising medium.

For more on growing Internet advertising sales and the impact on other media, read eMarketer's new US onlien ad spending: Peak or Plateau report